CPG Beverage or Dairy Product Packaging: Case Studies
Some examples of case studies of dairy product companies that have been able to increase their sales solely due to a change in packaging include Shatto Milk Company and China Mengniu Dairy Company. Complete details, including general information on dairy industry sales and packaging, are presented below.
GENERAL INDUSTRY INFORMATION
- In 2017, consumer packaged goods (CPG) companies in the United States failed to increase their sales. Their sales continued to decline, dropping from 1.5% in 2016 to 1.2% in 2017.
- Fast forward to 2019, US CPG companies are still under pressure to increase their sales, making most of them turn to digital transformations that might help them boost their inventory.
- Other companies, such as Halo Tops (maker of lower calorie ice cream), opt to deeply understand the needs of their consumers and then make use of unique packaging that speaks to what consumers want.
- Throughout the years, CPG brands have been using packaging to express their identity and those that have been able to get it right, like Campbell's Soup and CocaCola, have been able to achieve so much and get recognition worldwide.
- The dairy products packaging market was valued at $880 billion in 2016 and is expected to grow at a rate of 4.5% over the next decade.
- Currently, the market is full of dairy and dairy-alternative products with the dairy industry continuing to bring forth other innovative products.
- Despite the increase of new innovative products, dairy companies must ensure that their packaging not only keeps products fresh but also attracts consumers.
- Dairy product companies also need to ensure that packaging remains convenient, thus, on-the-go dairy packaging options with clean labeling are a must.
- According to McKinsey & Company, dairy CEOs were interviewed and asked to name their top three innovations in the dairy industry. In 2015, the top three innovations were Greek yogurt, organics, and nondairy alternatives.
- However, in 2018, the three most prominent innovations changed to Fairlife, protein, and packaging proving how packaging is very important in driving dairy products sales.
1. SHATTO MILK COMPANY
- Shatto Milk Company is a family-owned dairy farm that is located north of the Kansas City metropolitan area.
- In 2003, the company decided to start bottling its milk to provide customers with the freshest and best-tasting dairy products possible.
- Recently, Shatto Milk noticed that there was a demand for its flavored seasonal products. Consumers wanted the products in the market for longer than the two weeks Shatto used to release them.
- This new demand came with a challenge for Shatto, the company had to find a way to offer these flavored milks year-round without having to be concerned about shelf life and freshness.
- Therefore, the company turned to Berlin Packaging to get packaging help/solutions that would complement Shatto's existing packaging.
- One of Shatto's packaging needs was that the new milk flavorizer product be available in a specialty tin rather than a plastic jar or paper sleeve.
- After discussions, they arrived at a 76in x 76in stock can with friction-fit lids and silkscreened decoration. The design did an amazing job in pairing Shatto's simplicity with an outline of a colorful milk carton, intended to bring forth nostalgic feelings of childhood.
- This new product packaging was launched in the spring of 2018 and was made available on Shatto online home delivery service as well as local grocers.
- However, the popularity of the flavored products with new packaging has been overwhelming, and as a result, the new milk flavorizer powders are going to be the first product that Shatto will distribute nationwide starting sometime later in 2019.
2. CHINA MENGNIU DAIRY COMPANY
- The company is one of the leading dairy product manufacturers in China, with Mengniu as its core brand.
- Mengniu offers diverse products including liquid milk products, ice cream, milk formula, and cheese. In 2018 and 2019, Mengniu made it onto the “Global Dairy Top 10” list published by Rabobank.
- Mengniu turned to Tetra Pak China to find a different look/packaging to strengthen the sales of its organic milk.
- The operational marketing director at Tetra Pak China said that they collaborated with Mengniu in assessing market opportunities with their studies showing that millennials prefer buying small portions and drinking on-the-go.
- Therefore, they came up with the Tetra Prisma Aseptic Edge 250 which has an octagonal shape, fits comfortably in the hands, has a large resealable opening, and a metallic effect.
- This new packaging and refreshed look made Mengniu organic milk stand out on the shelves.
- When the new organic milk hit the market in June 2018, it immediately became popular and as a result, Mengniu reported a 49% rise in 2018 net profit while revenue jumped 14.7% because of increased sales.